Senate File 482 - IntroducedA Bill ForAn Act 1relating to competitive bidding requirements for
2construction by a private party of property to be
3lease-purchased by certain government entities and including
4effective date and applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 8.46, subsection 4, Code 2019, is amended
2by striking the subsection.
3   Sec. 2.  Section 26.2, subsection 3, paragraph a, Code 2019,
4is amended to read as follows:
   5a.  “Public improvement” means a building or construction
6work which that is constructed under the control of a
7governmental entity and for which either of the following
8applies:

   9(1)  Has been is paid for in whole or in part with funds of
10the governmental entity.
   11(2)  A commitment has been made prior to construction by the
12governmental entity to pay for the building or construction
13work in whole or in part with funds of the governmental entity.
14   Sec. 3.  Section 26.2, subsection 5, Code 2019, is amended by
15striking the subsection.
16   Sec. 4.  Section 260C.38, subsection 3, Code 2019, is amended
17to read as follows:
   183.  Subject to subsection 4, before Before entering into a
19lease agreement with a purchase option for a building to be
20constructed, or placed, upon real estate owned by the community
21college, the board shall first adopt plans and specifications
22for the proposed building which it considers suitable for the
23intended use, and the board shall also adopt the proposed
24terms of the lease agreement and purchase option. The board
25shall invite bids, by advertisement published once each week
26for two consecutive weeks in the county where the building is
27to be located. The lease agreement shall be awarded to the
28lowest responsible bidder, or the board may reject all bids and
29readvertise for new bids.
30   Sec. 5.  Section 260C.38, subsection 4, Code 2019, is amended
31by striking the subsection.
32   Sec. 6.  Section 262.34, subsection 1, Code 2019, is amended
33to read as follows:
   341.  When the estimated cost of construction, repairs, or
35improvement of buildings or grounds under charge of the state
-1-1board of regents, including construction, renovation, or
2repairs by a private party of a property to be lease-purchased
3by the board
exceeds one hundred thousand dollars, the board
4shall advertise for bids for the contemplated improvement or
5construction and shall let the work to the lowest responsible
6bidder. However, if in the judgment of the board bids received
7are not acceptable, the board may reject all bids and proceed
8with the construction, repair, or improvement by a method as
9the board may determine. All plans and specifications for
10repairs or construction, together with bids on the plans or
11specifications, shall be filed by the board and be open for
12public inspection. All bids submitted under this section shall
13be accompanied by a deposit of money, a certified check, or a
14credit union certified share draft in an amount as the board
15may prescribe.
16   Sec. 7.  Section 278.1, subsection 2, paragraph b, Code 2019,
17is amended to read as follows:
   18b.  Subject to paragraph “c”, before Before entering into
19a rental or lease-purchase option contract, authorized by the
20electors, the board shall first adopt plans and specifications
21for a building or buildings which it considers suitable for the
22intended use and also adopt a form of rental or lease-purchase
23option contract. The board shall then invite bids thereon,
24by advertisement published once each week for two consecutive
25weeks, in a newspaper published in the county in which the
26building or buildings are to be located, and the rental or
27lease-purchase option contract shall be awarded to the lowest
28responsible bidder, but the board may reject any and all bids
29and advertise for new bids.
30   Sec. 8.  Section 278.1, subsection 2, paragraph c, Code 2019,
31is amended by striking the paragraph.
32   Sec. 9.  Section 298.3, subsection 1, paragraph j, Code 2019,
33is amended to read as follows:
   34j.  The purchase of buildings or lease-purchase option
35agreements for school buildings. However, a contract
-2-1for construction by a private party of property to be
2lease-purchased by a public school corporation is a contract
3for a public improvement as defined in section 26.2. If
4the estimated cost of the property to be lease-purchased
5that is renovated, repaired, or involves new construction
6exceeds the competitive bid threshold in section 26.3, the
7board of directors shall comply with the competitive bidding
8requirements of section 26.3.

9   Sec. 10.  Section 331.301, subsection 10, paragraph i, Code
102019, is amended to read as follows:
   11i.  A contract for construction by a private party of
12property to be leased or lease-purchased by a county is not
13 a contract for a public improvement and is subject to under
14 section 331.341, subsection 1. However, if a lease-purchase
15contract is funded in advance by means of the lessor depositing
16moneys to be administered by a county, with the county’s
17obligation to make rent payments commencing with its receipt of
18moneys, a contract for construction of the property in question
19awarded by the county is a public improvement and is subject to
20section 331.341, subsection 1.

21   Sec. 11.  Section 364.4, subsection 4, paragraph i, Code
222019, is amended to read as follows:
   23i.  A contract for construction by a private party of
24property to be leased or lease-purchased by a city is not
25 a contract for a public improvement under section 26.2,
26subsection 3. If the estimated cost of the property to be
27lease-purchased that is renovated, repaired, or involves
28new construction exceeds the competitive bid threshold set
29in section 26.3, the city shall comply with the competitive
30bidding requirements of section 26.3
, except for purposes of
31section 26.12. However, if a lease-purchase contract is funded
32in advance by means of the lessor depositing moneys to be
33administered by a city, with the city’s obligation to make rent
34payments commencing with its receipt of moneys, a contract for
35construction of the property in question awarded by the city is
-3-1subject to chapter 26
.
2   Sec. 12.  EFFECTIVE DATE.  This Act, being deemed of
3immediate importance, takes effect upon enactment.
4   Sec. 13.  APPLICABILITY.  This Act applies to lease-purchase
5agreements entered into on or after the effective date of this
6Act.
7EXPLANATION
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
   10This bill relates to competitive bidding requirements for
11construction on properties that certain government entities
12will lease or lease-purchase.
   13Code chapter 26 (public construction bidding) imposes public
14bidding requirements on certain public improvements that are
15estimated to cost above a threshold amount.
   16Under current law, a contract for construction by a private
17party of a property to be lease-purchased by the state of Iowa,
18a community college, a public school corporation, or a city is
19a contract for a public improvement under Code section 26.2.
20Under current law, all lease-purchase contracts by a county
21are contracts for public improvements and are subject to Code
22section 331.341. By operation of law, such contracts that
23exceed the threshold amount must comply with the requirements
24of Code chapter 26. The state of Iowa, a community college, a
25public school corporation, a city, or a county must therefore
26take competitive bids pursuant to the process set forth in Code
27chapter 26 for renovations, repairs, or new construction on a
28property to be lease-purchased that exceeds the competitive
29bid threshold set in Code section 26.3. In addition, current
30law states that the construction, renovation, or repairs by a
31private party of property to be lease-purchased by the board
32of regents is subject to competitive bidding requirements when
33the cost of the construction, renovation, or repairs exceeds
34$100,000.
   35Under the bill, a contract for construction by a private
-4-1party of property to be lease-purchased by the state of Iowa,
2a community college, or a public school corporation is not
3considered a contract for a public improvement for purposes
4of Code chapter 26. The bill also removes the construction,
5renovation, or repairs by a private party of property to be
6lease-purchased by the state board of regents from competitive
7bidding requirements.
   8Under the bill, a contract for construction by a private
9party of a property to be lease-purchased by a county is not
10a contract for public improvement under Code section 331.341,
11subsection 1, unless a lease-purchase contract is funded
12in advance by means of the lessor depositing moneys to be
13administered by the county, with the county’s obligation to
14make rent payments commencing with its receipt of moneys.
15Additionally, a contract for construction by a private party
16of a property to be lease-purchased by a city is not a contract
17for public improvement under Code section 26.2, except for
18purposes of Code section 26.12. However, a lease-purchase
19contract funded in advance by means of the lessor depositing
20moneys to be administered by the city, with the city’s
21obligation to make rent payments commencing with its receipt of
22moneys, is subject to Code chapter 26.
   23The bill is effective upon enactment and applies to
24lease-purchase contracts entered into on or after the effective
25date of the bill.
-5-
js/rn